Peters, Vargas Call For Action On Student Interest Rates

Local Democratic Congressmen say it is time to act on keeping interest rates low for federal student loans.

SAN DIEGO  The interest rates for federally-subsidized student loans are set to double July 1, to 6.8 percent from 3.4 percent unless Congress can compromise.

Photo credit: Spark Photography

Senator Juan Vargas (D) arrives at Golden Hall, November 6, 2012.

Two local Democratic representatives are calling on their colleagues to act.

So far, there are three competing plans to keep federal student loan interest rates from making that dramatic jump next month. One Democratic proposal would extend the current rate for two more years, while plans from the White House and Republicans in the House of Representatives would tie future rates to 10-year treasury bonds. The Republican add-on to the treasury bond rates would be higher and their plan would allow rates to fluctuate annually. The White House proposal would set fixed rates for each loan.

San Diego Congressman Scott Peters was one of just four House Democrats to vote for the Republican measure. He joined fellow San Diego Congressman Juan Vargas at Mesa College on Friday to call for Senate action and House votes on the other proposals.

“Students are facing a lot of debt now," he said. "It’s no time, when the economy is like it is, for us to be adding to that burden. And at a time when the country is challenged by global competition, we have to compete on our brain power. And we shouldn’t be discouraging qualified kids from getting educations.”

Congressman Scott Peters.

The Senate may be closing in on a compromise between the administration and Republican proposals, according to national news reports.